Roberts Insurance Group Blog
After years in the insurance industry and after helping hundreds of Georgian homeowners with their insurance, we've compiled an almost never-ending list of industry "secrets" that 99.9% of homeowners are unaware of. Luckily for you, and our clients, we're sharing the top 5 things you need to be aware of when it comes to your homeowners insurance:
If you call your carrier's 1-800 number to ask about potential coverage for a claim, it is recorded as a claim on your record
So something just happened. You noticed a little damage and, being the responsible homeowner you are, you call your carrier's claims department just to see if it's something that would be covered and if you need to get a claim filed. Turns out, the damage was minor and not a big deal at all, thankfully.
Did you know that this is likely recorded on your claim record as a filed claim with a $0 payout? Did you know that this is actually effecting your rates and eligibility? Yep- unfortunately it's true! The insurance company's logic here is that they want to keep their insureds from over-using their policy. Any time they receive a call, send an adjuster out, enter data into their system, etc. it costs money and resources.
What should you do instead? Unless you are 100% certain you need to go ahead and get a claim FILED, you need to call your agent or broker directly and explain the situation. They will be able to answer most of your coverage questions and give you the proper advice and guidance. And if they don't know, they have the ability to call the carrier directly and ask a "hypothetical" coverage question to be able to provide the proper guidance. And most importantly, it will not be recorded as a claim! It will only be recorded as a claim if you end up contacting the claims department at the insurance company.
Small claims can have major impacts on your rates and ability to get a new policy
This piggybacks off of the previous point. Small claims can have huge impacts on your premium and make it difficult for you to get a new or better policy for 3-5 years.
We see it all the time- an insured files a claim, gets $300 from the insurance company and then their rates go up by $200 per year. Was it worth it? This same person, calls the 1-800 number to ask about potential coverage for some other minor damage. The company records a $0 claim in their system. This insured now has 2 claims in the last year and has gotten a measly $300 from their carrier and a $200 per year increase. The worst part is that, on top of everything, they are likely to be stuck with that carrier for up to 5 years!
When an insurance company is evaluating a new policy or a new customer, they look at their claim history for the last 5 years (minimum). Even if they see that a new customer has only been paid $300 by their previous company, they see that they have 2 recent claims. Claim frequency (2 claims in 1 year or 2 claims in 2 years, for this situation) is a huge factor when it comes to rates and eligibility. Even though only $300 has been paid, many insurance carriers have guideline that have a limit on the number of recent claims that they will accept, which would make this customer ineligible for a new policy.
The moral of the story is, find a good agent or broker that you trust and give them a call to evaluate your options before filing a claim.
Credit is the #1 factor when it comes to insurance rates
True. I once heard an executive at a fortune 100 company say that if credit was the only data point considered when determining rates, the company could still remain profitable. There are, in fact, over 200 different data points and variables that go into making the rate for the premium you pay on your policy and credit is the biggest of them all.
Homeowners with low deductibles are typically over-paying to carry a low deductible
A low deductible in the Canton, GA market is typically $1,000 or less. Something we do for all of our clients is give them options at higher deductibles to see what will work best for them. Here is a real life example for a new homeowners policy that we wrote a few weeks ago:
$1,000 deductible was $1,349 per year.
$1,500 deductible was $1,122 per year.
$2,500 deductible was $1,070 per year.
Now let's look at how that breaks down:
This customer would have to pay an extra $227 per year to have a $1,000 deductible vs $1,500. This equates to paying $227 per year for $500 of extra insurance. Doesn't make sense, does it?
But on the same hand, they would only save $52 per year to go from $1,500 to $2,500 deductible. That wouldn't make sense either, right?
For this customer, their best option was the $1,500 deductible. Even though the $1,349 for the $1,000 deductible was less than their previous policy, it makes more financial sense to raise that to $1,500.
Your service lines (water, sewage, gas, electricity) ARE NOT covered unless you have a special endorsement
If something happens to your service lines within your home, there's definitely potential for coverage. However, if something happens to them between your foundation and the street, there's absolutely 0 coverage unless you have a special endorsement, common called "service line coverage". It is very inexpensive, typically $20-$60 per year depending on your carrier and we HIGHLY recommend it because this is a very common issue for homeowners.
Whether they are damaged from root invasion, wear and tear, or direct impact, this coverage will pay up to $20,000 in many cases AND you will typically only have a $500 for this type of claim.